Coal’s share in the nation’s electricity mix is predicted to fall to 29 percent this year, as natural gas-fired power continues to increase, according to the Energy Information Administration’s Short Term Energy Outlook released Tuesday.
Coincidently, coal production is expected to decline, though that slide may take place in the Appalachian coal region more than Wyoming’s Powder River Basin.
Wyoming mines provide about 40 percent of the coal burned in U.S. power plants, more than the next six coal-producing states. But the Cowboy State’s coal sector is competing for a diminishing share of the pie. This year, that share will narrow further, from 30 percent to 29 percent.
Wyoming coal production took a steep dive in 2016, when three of the largest coal companies that operate mines in Wyoming were in bankruptcy. Additionally, weak demand for coal in the electricity sector at the time, and competition brought by cheap natural gas took a toll on Wyoming mines.
The industry rallied last year, though hope of a return to previous norms has dimmed.
Coal production is predicted to fall this year by 3 percent nationally, down to 751 million short tons. The amount of coal that is used in the country, particularly by coal-fired power plants, will be down as well.
According to the Energy Information Administration, coal from the West will increase slightly this year from 430 million short tons in 2017 to 432 million short tons in 2018. Appalachia will lose tonnage, while coal produced in the Midwest will improve.
The outlook also touched on coal’s competitor, natural gas. The national spot price, Henry Hub, is expected to average about $3 this year, rising to an average $3.11 in 2019. At that price point, coal firms argue they can still compete.
But as coal’s contribution falls, natural gas will take the largest slice of the electricity mix in 2018, rising to 34 percent compared to 32 percent last year.
Most of the new power capacity built this year is also expected to be in the form of natural gas plants, representing a shift in the renewable energy trend. Since 2013, the majority of new power has been from wind and solar, according to the Energy Information Administration. The majority of new gas plants are planned in eastern states, including Pennsylvania and Virginia, according to the Energy Information Administration.
There are no new coal plans in development nationally.